Actually, it was a tough month, for most crypto guys, especially for those $LDO holders.
A couple of months ago, I put my $LDO on Balancer as LP( LDO-WETH pool with 80:20 weight) with a 30~40% APY. At that time, the yield could easily cover my life living costs. This made me quite confident to take a gap and stay with my family. Things change fast. In two months, my LP value dropped 90% and the yield dropped 70% due to the reward token( $BAL) prices down and the pools rewards ratio competition.
In the past couple of weeks, I tried to convince the key influencers in the community to support a proposal that can bring some benefits, or even just hope to those who have trusted this project by framing or buying $LDO, like me. I have to say, it is not an easy way. It’s a bit tricky that the DAO treasury management does not have any interest in supporting the value of $LDO, which is still the largest part of its own assets. So, I think it’s time to organize and save us by ourselves.
I know that I’m not alone. Based on my research, there are about 2650 $LDO holders with a 1K~1M balance.
Still have faith in the future of Lido, have the willingness to keep most of your $LDO position during the bear market and do have the demand of yield generation on your holdings.
Still have some bullets to shoot and can take a little bit of risks.
Then, I recommend that:
Invest your $LDO in the Balancer LDO-ETH pool and that will let you keep 80% of your $LDO position( the rest will swap to WETH automatically).
Invest your $ETH in the Balancer BAL-ETH pool and lock for 1 year ( via Balancer Vault or related bribe protocol, like Aura).
Place your vote on the LDO-ETH pool to increase the allocation ratio toward LDO-ETH LP staker( there is a follow step after providing liquidity, stake your lp token without a lock up).
These recommendations and initiatives are just a beginning. More actions could be taken place based on the similar values and interest among us. We can have more frequent internal discussions and stand as a whole. We can make a small voice be heard. We can have an influence on future DAO governance. We can even issue a small fund and have our own subDAO governance structures.
Let me place a poll here and let me know your views on this subDAO initiative.
Yes, I’m in.
Interesting! Maybe I will join you in the future.
Is this a joke? Where is my popcorn?
It’s bullshit, I don’t believe you can make any changes!
To be more clear, this initiative is not targeted to stand on the opposite of any group of stakeholders in the community. Our goal is just to build a diverse DAO ecosystem, focus on a group of holders’ interests.
The following plans are:
Phase 0: Temperature check. (Present to the end of June. 2022)
In this phase, let’s look over whether the more boardly community members have a strong willingness to build a subDAO as the framework I mentioned above. During this period of time, I’d like to discuss with everyone who has any questions on this initiative. By the end of June, if there will be more than 10 “Yes, I’m in.” supporters, or more than 5 “Yes, I’m in.” supporters who hold more than 100K $LDO (including me), we will go to “Phase 1”.
Phase 1: Rules and Guidelines draft and v1.0 finialized. (1st. July 2022 ~ 15th. July 2022)
In this phase, we will establish an internal workgroup on TG. Make close discussions on the details of the rules and plans for the future.
Phase 2: SubDAO establishes announcement and boost actions started. ( Since 16th. July 2022)
In this phase, the subDAO will give birth and start running. We will post our plans and statistics during the action processes to make it transparency among the subDAO, and more broadly, among the whole Lido community.
Here are some details about the benefits and risks of the behavior of the initiative.
Cash flow might be a deep demand among most $LDO holders. Provide liquidity on Balancer LDO-ETH pool will allow you to make about 2% monthly return paid in $BAL. $BAL has a healthy tokenomics since they adopted veBAL model on April 7th 2022. IMO, $BAL is one of the most undervalued tokens, especially after the past weeks market collapse.
Invest in the BAL-ETH pool and lock up for veBAL will allow you to share 75% of the admin fees collected by the protocol, along with other veBAL holders. As I have noted in another post, this will give you a 12.5% APR, based on the current and near past conditions. In addition, your veBAL will boost your LDO-ETH $BAL return with up to 2.5X power.
Although I prefer you join this action by directly locking up your BAL-ETH lp token on Balancer and vote for LDO-ETH pool, there still have other options(bribe protocol, like Hidden Hand, Aura etc.). These bribe protocols may also bring you addition return.
Price volatility. No matter how optimistic I am on the future of $BAL, there will always be a price valuation risk. Never take the risks more than you can afford.
Impermanent losses. Provide liquidity on Dex will always face the risk of impermanent losses. Although there two pools are all functioned with an 80:20 weight mechanism, which could reduce the impermanent losses by 60%, compared to a normal 50:50 pool, the risk is still there.
There are some community members who submitted the invitation form till now. For more broadly adoption of this subDAO, the expiration of Phase 0 will be postponed for a week(will be ended on 7th July), which means anyone who would like to join our Genesis Group, you still have the chance to do so via the link.